Byline: Evan Clark With contributions from Arnold J. Karr
Sears Cuts Losses, but Doubts of Future Linger
Sears holdings corp.'s third-quarter losses narrowed and the Kmart division posted a 0.5 percent rise in comparable-store sales, but Wall Street is skeptical about company chairman Edward Lampert's retailing skills.
Sears, like many of the broadlines and mass retailers who reported results Thursday, showed modest improvement as stores battle for consumer dollars in an environment marked by high unemployment, tight credit and an increasingly discretionary approach to spending on apparel.
The Bon-Ton Stores Inc. and Stage Stores Inc. reduced their third-quarter losses, and Stein Mart Inc. returned to profitability. Off-pricer Ross Stores Inc. continued to prosper in a value-focused economy.
But analysts said Sears is at greater risk than its competitors because of weak sales, sweeping cuts and the uncertain retail vision of hedge fund titan Lampert.
"It is not clear how he expects this to be a surviving retailer over the long term with just little to no investment in the store or the product or the systems or the operational procedures," said Bill Dreher Jr., a Deutsche Bank analyst who maintained his "sell" rating on the stock. The company has cut selling and administrative expenses by $373 million this year.
"It is not clear how [Edward Lampert] expects this to be a surviving retailer over the long term with just little to no investment in the store."
Bill Dreher Jr., Deutsche Bank
Dreher said Lampert, the billionaire who masterminded the 2005 Sears-Kmart merger, might be looking to …